London-based Tate & Lyle posted fiscal year profit of £309 million ($477 million), up from £167 million in the previous fiscal year. Sales in the fiscal year rose to £3,088 million ($4,770 million) from £2,720 million, which marked a 14% increase as reported and a 16% increase in constant currency.
“Tate & Lyle performed well with steady growth across a key number of our markets supported by exceptionally strong returns from co-products in the first half,” said Javed Ahmed, chief executive of Tate & Lyle, when financial results were given May 31. “This was a year of working hard to achieve a number of our business transformation milestones while at the same time delivering profitable growth.”
Within the Specialty Food Ingredients division, adjusted operating profit for the year ended March 31 rose to £214 million, which was up from £206 million in the previous fiscal year. Higher input costs partly offset sales growth. The company incurred costs of £12 million of capital expenditures and £1 million of operating expenses associated with restarting a sucralose manufacturing facility in McIntosh, Ala.
Fiscal-year sales in the Specialty Food Ingredients division rose to 10% ($12% in constant currency) to £887 million, which compared with £805 million in the previous fiscal year. Volume grew by 4%.
Specialty Food Ingredient is divided into the three categories of high-intensity sweeteners, food systems and starch-based specialty ingredients.
In high-intensity sweeteners, sales of Splenda sucralose and Purefruit monkfruit grew by 6% (8% in constant currency) to £197 million from £185 million. In food systems, sales increased 5% (3% in constant currency) to £196 million from £186 million, and volume was up 1%. In starch-based specialty ingredients, sales rose 14% (17% in constant currency) to £494 million from £434 million, and volume was up 4%.
Tate & Lyle expects continued sales growth within Specialty Food Ingredients in the current fiscal year. Operating margins are expected to be lower, which would reflect additional fixed costs associated with restarting the sucralose facility in McIntosh and its share of the investment in a business transformation program.
Tate & Lyle said later this year it may launch a range of products derived from salt reduction technology. Tate & Lyle in October 2011 signed an agreement with Eminate Ltd., a subsidiary of The University of Nottingham in the United Kingdom, for its Soda-Lo, a salt reduction technology.
In Bulk Ingredients, fiscal-year adjusted operating profit for the year ended March 31 increased to £172 million from £157 million in the previous fiscal year. Improved performance from industrial starches in Europe and strong returns from co-products drove the increase. Fiscal-year sales rose 15% (18% in constant currency) to £2,201 million from £1,915 million. Volumes were down 2%.
Within its Bulk Ingredients division, Tate & Lyle in the current fiscal year anticipates improved bulk sweetener margins in both Europe and the United States to offset expected more normal co-product returns and an impact of softer market conditions in industrial starches in the Europe and ethanol in the United States.
